One of the findings of the energise 2022 survey was that middle management has less confidence in the energy transition than their leaders or those new to the sector.
Middle management resistance to change isn’t new
80% of business transformations fail and many of these factors can be traced back to middle management resistant to the project. Digital transformation over the last few years have found that senior executives have a much more positive outlook on what is possible in a digital transformation than their reports. This leads to behaviour which at best slows down the change at worse stops it in its track. Many digital transformations have taken so long that the results they deliver end up being disregarded as the technology has become obsolete because of the speed that technology has developed externally. This is big risk for the energy sector as the speed of change has increased exponentially in the last 18months and something that Orstead who have made this transition highlight that change is exponential.
Middle management in the energy sector unlike many industries contains people who have worked for the same company potentially in the same business sector for 20 years or more. This means that they have developed strong personal networks and are well attuned to the politics of the company and know how to “go through the unofficial channels” to make things happens outside of the official process. They also have long memories and many of them are within 10 years or so of retirement so with a plan for hydrocarbon activity for the next 30-50 years there is very little incentive to change.
So given these characteristics this group can easily block an initiative, on the other hand they have skills and resources to accelerate the transition. Imagine a population of 1000 middle managers and if you were able to engage 10% of them so you had 100 core resource ready to deliver, imagine what you could achieve?
Compare 100 middle managers to engaging 100 experience consultants, middle managers have the following benefits
- Don’t have to go up the learning curve and are respected in the business
- know how to get things done (officially and unofficially).
- There for the long-term enabling a solution that can grow and adapt which is what is needed for the energy transition.
The cost of 100 experienced consultants could be 2-3mln a month. Can you afford not to engage and activate your middle management cohort- this is a billion-dollar opportunity?
So how does a CEO engage this core cohort?
Engaging middle management is an old age problem and there have been many attempts some more successful than others. The opportunity we have now is that we are experiencing a high degree of change and new people are joining the sector who come with new ideas and approaches. These new entrants have the potential to shift engrained mind sets and engage middle managers in the change.
So, what are the steps to take?
- Identify the initiative or area of the business:
It’s important not to try and start too big. Focus on a particularly initiative or area that you can properly resource and sponsor. Also pick something that resonates with the business in terms of the transition. The objective here is to demonstrate success so you can increase the buy with the rest of the organisation. The change is about taking steps and the first steps may take longer, however taken well they will accelerate the rest of the change.
- Understand the gap between middle management and senior management on the issue
Look at the data in terms of what middle management think about the change, you may be able to utilise data from staff survey or do a series of interviews. To get truly independent views these interviews need to be confidential so utilising someone independent can really help here.
- Workshop the issues with a mix of middle management and their reports
Going through the issues with the middle management and their reports and starting to understand the value in resolving those issues and why they are important is key. What’s also important is bring in people new to the area with fresh idea to bring some more diversity into the thinking. This will kick the project off well at the start
- Bring in fresh ideas
There is a need to shift the culture and mind set so consider how you can fresh the core team with ideas? Example of this include Reverse mentoring, moving middle managers around rotating staff from new energies into the existing businesses.
- Set up the programme for success
Ensure senior sponsorship for the programme with the results of the programme aligned to their targets. Pick a selection of influential middle managers some supporting/some against, sufficient resources and champion them. Ensure that the team has sufficient time to deliver the work, so stop other work or get resource in so the team is not distracted by day to day. It maybe you need to do a review of the activities prior to the programme kicking off to rationalise the work loads
This is about demonstrating a quick win and getting buying from other middle managers that this is the way to go. Small steps which then start to snowball and move up the exponential curve building enthusiasm and learning as you go.
The energy transition is key and will happen faster than many companies think. This leads companies to be a risk of failure and being “MBA case studies” of the like of Kodak and blockbuster if middle management engagement behind the change is not addressed.
Engaging your middle management is a billon dollar opportunity to transform your business to be highly profitable in the net zero world generating energy and delivering products associated with energy. Remember that 85% jobs that will exist in 2030 currently don’t exist so you will need a core resource innovating and driving change to adapt to this world. You really can’t afford not to engage your middle managers, can you?